More than 100 London investment bankers who sued Commerzbank for €52 million (£44 million) over unpaid bonuses today won a landmark victory when the Court of Appeal upheld the decision in an unanimous verdict.
Several bankers are in line for at least £1 million each.
Commerzbank responded in unusually strong language, saying it was “disappointed” with this “regrettable” decision and expressed surprise at the way the English legal system worked. “In other jurisdictions, national courts upheld Commerzbank’s position,” said the banking giant, noting how a court in Germany rejected a similar claim while Italian and Japanese courts have also been more favourable towards the bank.
Commerzbank said it was particularly surprised given “the ongoing regulatory, public and shareholder calls to establish a sound relationship between banks’ performance and variable remuneration”. The bank, advised by legal giant Linklaters, is “considering its legal options”, which could involve going to the Supreme Court.
The 104 London bankers originally sued Commerzbank in 2009 because they claimed that they had been given a guarantee over the bonuses in August 2008 at a meeting with senior management in London.
At the time, the bankers worked for Dresdner Kleinwort. The bank was then bought by Commerzbank, which was bailed out by German taxpayers, and bosses tried to slash bonuses by 90% in early 2009. However, the bankers, who hired two London solicitors, Stewarts Law and Mishcon de Reya, said Commerzbank had reneged on a contractual obligation.
The Court of Appeal has now upheld an earlier verdict by the High Court, which ruled in May last year that the bonuses should have been paid — despite the worldwide banking collapse of autumn 2008.
Clive Zietman, head of commercial litigation at Stewarts Law, which acted for 83 of the bankers, said: “This is not just a victory for my clients. It is a triumph for common sense and for some very well-established principles of English contract law. It is a great pity that the bank saw fit to contest so vigorously and for so long, a case that could so easily have been avoided.”
The bankers’ original claim was for around £30 million but the bill has climbed, partly because of legal costs. Commerzbank maintained bonuses were “provisional” and it was “reasonable” to cut them after Dresdner made a loss in 2008.Reuse content